Navigant Research Blog

This Land Is a Demand Response Land for You and Me

— June 26, 2015

Just like the old children’s song, from California to the New York island, June has been a good month for demand response (DR) from coast to coast. First, the California Independent System Operator (CAISO) released a proposal to allow aggregated distributed resources to bid into its markets, potentially as early as next year. Then, the New York Public Service Commission (NYPSC) approved all of the state’s utilities’ plans (aside from Consolidated Edison [ConEd]) to commence DR programs this summer. The programs are modeled on ConEd’s existing suite of DR programs.

CAISO found a way to introduce a new acronym, distributed energy resource provider, or DERP, into the industry lexicon. The proposal lays out a framework for allowing aggregated resources of at least 500 kW to participate in the market. There is also a requirement that any aggregations serving more than a single grid pricing point must be limited to a single type of technology. Metering has been one of the hurdles to DR participating in CAISO markets because the system requires generation-scale monitoring. The new rules would allow DR to be aggregated via the Internet, providing for a broader range of resources to be brought to market with less cost. DERP aggregators will be a scheduling coordinator metered entity, which will avoid “having each sub-resource in a DERP aggregation engaged in a direct metering arrangement with the CAISO,” according to the proposal. Access to ancillary markets, however, will still require resources to allow constant monitoring by CAISO. CAISO’s board is set to consider the proposal in July, but would need approval from the Federal Energy Regulatory Commission (FERC) before it can move ahead with the plan.

Meanwhile, In New York …

A week later across the country, NYPSC gave the green light for the upstate investor-owned utilities to follow ConEd’s lead and offer distribution-level DR programs to their customers starting this summer, a very quick turnaround time. This order is one of the early wins of New York’s Reforming the Energy Vision proceeding to transform the utility model in the state. The programs have three basic types: a peak shaving program to be called on a day-ahead basis when demand is expected to hit the summer peak, a local distribution reliability program to be called on as needed for localized issues, and a direct-load control program that lets customers install a device that can be controlled by utilities to control loads to compensate for system stress. Customers can take part in the programs individually or through an aggregator. This summer, the utilities are prioritizing areas that offer the greatest benefits at the lowest costs, based on factors including system stress and local distribution constraints for the year. All of the DR programs will be available starting next summer.

So, while the DR community continues to wait for the Supreme Court’s ruling on FERC Order 745 on DR compensation, the states are pushing the DR agenda ahead rather than waiting for direction from the feds.


Solving the Ocean Plastic Problem

— June 26, 2015

Every year, roughly 26 million pounds of plastic travels from coastlines around the world and into the oceans. This plastic contributes to massive floating garbage patches that threaten the health of marine life, humans consuming fish (ocean plastic creates high levels of pollutants and chemicals inside fish), and the oceans themselves. Common human health effects linked to these chemicals from plastic in fish are cancer, malformation, and impaired reproductive ability.

According to National Geographic, the well-known Great Pacific Garbage Patch is a massive collection of marine debris spanning the waters from the West Coast of North America all the way to Japan. Some scientists estimate that in its Eastern section (between Hawaii and California), the amount of garbage there is twice as large as the state of Texas, representing the largest landfill in the world.

A Potential Solution?

A project called The Ocean Cleanup plans to collect and remove plastic from the ocean, beginning with a coastal pilot deployment in mid-2016. The project plans to use a stationary array of long floating barriers that use the ocean’s natural currents to concentrate and collect the plastic. If implemented, this 1.2 mile cleanup device would likely be the world’s longest floating structure in the world. The Ocean Cleanup project claims that using a single 100 km (62 mile) cleanup array deployed for 10 years will passively remove 42% of the Great Pacific Garbage Patch. The project estimates that this would result in cleanup costs of €4.53 ($5.10) per kilogram.

Prevention Is the Best Tool

With 8 million tons of plastic ending up in the ocean every year, undoubtedly new solutions for ocean plastic removal are needed. Although interesting and potentially complicated solutions such as The Ocean Cleanup project are needed to get rid of the existing plastic in the oceans, the best long-term solutions are likely to be the simple ones; stop adding plastic to the ocean in the first place. According to the Natural Resources Defense Council, around 80% of marine litter (with most of it being plastic) originates on land. Beaches can offer better garbage and recycling options, individuals can choose to stop littering garbage while at beaches, and plastic producers can continue to design more fully recyclable packaging while reducing the amount of plastic in their products (e.g., smaller caps on water bottles).


States’ Roles in the Clean Power Plan

— June 25, 2015

Cross_Gatel_webThe U.S. Environmental Protection Agency (EPA) plans to finalize the Clean Power Plan (CPP) this summer; as part of the plan, states will have 1 to 3 years to submit State Implementation Plans (SIPs) to the EPA for review. Some states are already starting the planning process to develop an SIP, and most are beginning with stakeholder meetings that include utilities and other major players in their state. Other states are waiting to see the final regulation before they begin.

States face a complicated web of decisions when crafting SIPs. The figure below shows a simplified hierarchy of the paths that they may take. States are unlikely to go through the decision process in a linear fashion; instead, they will need to consider all options and narrow them down based on their existing policies, resources, and stakeholder goals, among other factors.

SIP Example Decision Process


CPP Decision Tree - Recreated

(Source: Navigant Consulting)


The first decision a state needs to make is whether to submit an SIP. If a state does not submit an SIP, the EPA will impose a Federal Implementation Plan (FIP). The EPA has indicated that they may include insights on what an FIP will look like when they release the final rule this summer. Some states have passed legislation limiting their state agencies from submitting an SIP without legislative approval, which could impede those states from submitting an SIP at all.

A decision that will need to be made early in the process is whether or not a state wants to work with other states to submit a regional plan. There have been proposals, for instance from Duke Nicholas Institute, that individual plans could be crafted to be standalone and still allow trading of credits with other states, similar to the way that renewable energy credits (RECs) can be traded among states even though Renewable Portfolio Standard (RPS) policies were not coordinated prior to implementation. However, many states are already in discussions about coordination efforts— for example, 14 Midcontinent states submitted comments to the EPA on its proposal and held a stakeholder event on June 5.

If states do work together on regional implementation plans, under the proposed rule they would have an additional year before their plan is due to the EPA. This allows additional time to coordinate among the many players involved across all coordinating states, but narrows the amount of time between when the implementation plan is approved by the EPA and compliance begins— potentially as little as 1 year.

Targets and Policies

Another decisions that states must states weigh in on is whether or not to use the rate-based target laid out by the EPA or to convert it to a mass-based target. This decision is interrelated with the kind of policy regime a state chooses to include in its SIP. A rate-based target may be more appealing to states that impose individual unit obligations on fossil units in their state, as it eliminates the uncertainty surrounding future load growth. Conversely, a mass-based target may be easier to implement in the northeast where a mass-based cap-and-trade system already exists.

States will also need to determine how to integrate existing renewable and energy efficiency policies into their SIPs and decide if new policies are needed. These include RPS, energy efficiency standards, and updates to building codes, and can be combined with cap-and-trade, as in California, or standalone.

There are many additional considerations for states to take into account as they craft implementation plans. For the best overall outcome it is recommended that states start early, have meaningful stakeholder involvement throughout the process, and leverage modeling and analytical tools where possible.


Turbocharger Suppliers Have a New Market to Pursue

— June 25, 2015

The recent Navigant Research report Automotive Fuel Efficiency Technologies concluded that one of the main approaches to delivering better fuel economy for cars is to downsize existing engines but coax more power out of them. The principle of increasing air pressure at an internal combustion engine intake to produce extra power is well-established and is known generically as forced induction. The two main mechanical types of forced induction are usually defined as:

• Turbocharging, where the compressor is driven by exhaust gases; and
• Supercharging, where the compressor is driven directly off the engine crankshaft

Turbochargers are well known for being a relatively simple way to get more power from a small engine, but also have the disadvantage of lag because the maximum boost is not available until the engine speed is high. Superchargers can be set up to provide boost at low engine speeds, but they also use power when they are not needed, and so they can adversely affect fuel economy under normal driving conditions.

A third variant, electric turbochargers, now looks set to hit the market. An electric turbocharger offers an engine boost on demand without the lag of an exhaust-driven component or the physical drag that a supercharger places on the engine. The technology operates from electrical energy that is recovered by regenerative braking, and takes advantage of the fact that electric motors develop their maximum torque immediately from a stationary position.

The concept has been under development for some years, and the biggest challenge so far is to get enough usable power from a 12V electric motor. However, with the imminent rollout of 48V electrical subsystems for advanced stop-start systems (as discussed in detail in the Navigant Research report 48-Volt Systems for Automotive Applications), it will become practical to implement an electric turbocharger for the first time. Audi is the only manufacturer to announce a planned launch so far, but most other manufacturers are thought to be working on similar concepts.

Other Suppliers

French Tier One supplier Valeo is one of the first to offer a production-ready electric turbocharger. The company acquired the switched reluctance motor technology from U.K.-based Controlled Power Technologies in 2011. The motor is liquid-cooled and the 48V system needs additional power electronics and a bigger battery than normal, so there are additional costs to consider. Benefits include improved performance as well as better fuel economy, so manufacturers are expected to be able to charge a premium.

Conventional turbocharger suppliers are also developing electric products. BorgWarner offers electric turbocharging in its eBOOSTER system, which has been tested on both gasoline and diesel engines. Honeywell is another well-established supplier of conventional turbochargers, and is thought to be developing an electric version for introduction in a couple of years’ time. As is often the case, emerging technology stimulates innovation from brand new companies as well as established suppliers; one example is U.K.-based Aeristech.

Fuel efficiency is a key focus for automotive manufacturers that want to avoid financial penalties for missing emissions targets in the coming years in many countries around the world. Incremental improvements of 1%–2% may not be enough, so investing in technology that has the potential to deliver significant fuel economy increases without sacrificing performance or drivability may be money well spent. Electric turbocharging looks likely to be the first application that will launch 48V systems into series production, a shift brings with it many other benefits of electrification that will challenge hybrid technology at a much lower price point.


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